9911796707
TMI Blog2025 (5) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... holding company of the assessee incurred a heavy loss on account of its high financial exposure and accordingly, went into liquidation under the foreign laws. Pursuant to the order to initiate the insolvent voluntary winding up of M/s Phoenix Global DMCC (supporting document 1 enclosed as Annexure I), the Joint Liquidators were appointed in UAE for the Holding Company in June, 2020. One of the Liquidators also resigned from the Liquidator position in March, 2021. Subsequently, the one of the erstwhile Directors of PCL Foods resigned on 6th May, 2021 and another erstwhile director passed away on 8th May, 2021. Further, the then financial controller/ Accountant of the Company also resigned from the company on 11th May, 2021 without sharing any documents and details of the Company. The Assessee Company was left without any books and records. After various follow ups and legal proceedings and pursuant to the order of National Company Law Tribunal, New Delhi (copy of order enclosed as Annexure II), new directors were inducted on the Board of the Company in February, 2021, who also left the Company subsequently in July, 2021 due to unavoidable circumstances of the Company. In these cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22/ 1037445143(1)] issued by Ld. TPO in this regard sought to rectify the adjustment proposed in the transfer pricing order dated 29.01.2021 forming part of draft assessment order and not the transfer pricing order dated 25.10.2021 passed by Id. TPO giving effect to the directions of Hon'ble DRP. Mistake apparent from records in Id. AO rectification order 3. That, without prejudice to any other ground, the Ld. AO grossly erred on facts and circumstances of the case in inadvertently determining the total income at Rs. 25,71,74,004/- instead of Rs. 15,16,78,329/- thereby making an inadvertent addition of Rs. 10,54,95,675/- in the computation sheet annexed with rectification order and raising the consequential demand of tax and interest thereon. 4. That of the difference of Rs. 10,54,95,675/- mentioned in ground taken herein above, a difference of Rs. 2,28,52,648/- is on account of the returned loss of the assessee not considered by the Id. AO and the remaining difference of Rs. 8,26,43,027/- is as a consequence of making transfer pricing adjustments twice. Mistake apparent from records in Id. TPO' rectification order 5. That, without prejudice to any other ground, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant. Adjustment for interest free advances 6. That the ld. TPO/DRP and consequently the Id. AO have grossly erred in facts and in law in not granting the adjustment in respect of interest free advances granted by the AE to the assessee. Application of CUP method using TIPS database 7. That the Id. DRP has grossly erred in law and in facts and circumstances of the case in not even adjudicating the grounds of objections relating to application of TIPS database prices as comparable data under direct method viz. CUP method. The Id. DRP and consequently the Id. TPO/ld. AO have erred in law in not passing a speaking order in respect of above ground. 8. That Id. TPO/DRP and consequently the Id. AO have grossly erred in not appreciating that transaction listed on TIPS database are product-wise and functionally similar with the assessee's international transactions. Further Id. TPO/DRP and consequently the Id. AO have erred in not appreciating that TIPS database has been upheld by various judicial courts and also accepted by revenue as valid database for application of CUP method and is also permitted as per Rule 10D(3). 9. It is prayed before the Hon'ble Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 97 International Transaction 4232682932 Proportionate International Transaction 58.28% Proportionate adjustment 129184138 The Assessing Officer will accordingly enhance the income of the taxpayer by Rs. 129184138/-. This shall be treated as the adjustment u/s 92CA of the I. T. Act, 1961." In view of above, the total income of the assessee is enhanced by Rs. 129184138/- by way of adjustment u/s 92CA(3) of Income tax ACt,1961. [Addition: Rs. 129184138/-] 5. In this case draft assessment order u/s 143(3) r.w.s 144C of Income tax was passed on 21.03.2021 and same was served upon the assessee company online electronically. The assessee company has filed objections before the Hon'ble DRP. The Hon'ble DRP has issued its directions u/s 144C (5) dated 22.09.2021. The Ld. TPO has given appeal effect to the order of DRP u/s 144C(5) of Income tax Act, which is reproduced as under:- "2. The adjustment was made in this case on TP issue by TPO u/s 92CA(3) dated 29.01.2021 was Rs. 12,91,84,138/-. 3. In this case assessee has filed objections before the Hon'ble DRP. The Hon'ble DRP has issued its directions u/s 144C (5) dated 22.09.2021 and effect of these dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 545 Operating Profit 9,68,53,5115 OP/OC 1.34% Therefore, OP/OC of the assessee after giving effect to the Hon'ble DRP's direction is revised to 1.34%. However, as per Rule 10CA(7) & Rule 10CA(4), the average of the comparables after giving effect to the Hon'ble DRP's directions comes to 3.32%. Accordingly the adjustment is made with the revised margin of 3.32% as given below- Particulars Amount Opening Cost 7,22, 16,97,545 Arm's Length Margin OP/OC 3.32% Arm's Length Margin 23,97,60,358 Arm's Length Revenue 7,46, 14,57,903 Operating Revenue 7,31,85,51,060 Difference 14,29,06,843 International Transaction 4,23,26,82,932 Proportionate of International Transaction 57.83% Proportionate Adjustment 8,26,43,027 4. In view of the above, the assessing officer is requested to make an adjustment of Rs. 8,26,43,027/-. " In view of above, addition of Rs. 8,26,43,027/- is made to the total income of the assessee company. [Addition: Rs. 82643027/-] Penalty proceedings uls 270A of Income tax Act, 1961 for under reporting of income has been initiated separately. 6. Subject to the above remarks the total income of the assessee is comp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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